Climate of High Deductibles Affects Billing Workflow
Surgery centers have seen an increase in high deductibles in recent years, which has created new billing workflow issues.
“In the past three years in the United States, patients’ deductibles in healthcare have increased 50%, and a lot of it is attributed to the Affordable Care Act,” says Kevin McDonald, senior vice president of sales and marketing at AdvantEdge Healthcare Solutions of Warren, NJ. “More and more, health plans are shifting responsibility from the insurance company to the patient. We’re seeing plans become more like catastrophic plans. So, for more people, the majority of cost is coming out of their pockets.”
For instance, the average deductible in 2017 was greater than $4,300, double what it was several years ago, McDonald notes. Thus, billing workflow has changed. Previously, the main task would be to verify the patient’s insurance, occasionally check the deductible, and then collect the copay. Then, the ASC would file with the patient’s insurance and bill the patient for the outstanding amount.
“We may have a $2,500 procedure done on a patient and five years ago, 80% would have been covered,” McDonald says. “In today’s environment, that $2,500 might be totally the responsibility of the patient. So, we’re seeing the accounts receivables skyrocket because of the amount due [from] the patients themselves.”
This means ASCs must change how they collect upfront and bill.
“Once the cost drops to the patient’s responsibility, and you don’t collect up front before the procedure is done, then the collection rate drops to 21%,” McDonald says. “That’s not ASC-specific, but in healthcare in general — the ASC rate could be higher. But once they leave that front window when they come in, your chance of recovery of that money drops significantly.”
Increasing collections at the point of care carries numerous advantages, including:
- increasing overall collections;
- increasing patient satisfaction;
- reducing the overall cost to collect, cutting down the cost of sending statements to patients;
- reducing costs from collection calls;
- reducing bad debt.
Here are some tips on how to increase collection and reduce billing workflow problems:
• Evaluate current workflow. For many ASCs, the billing workflow will look the same now as it did 10 years ago. This would be a big mistake.
“I was in one surgery center recently, sitting at the front desk, and I watched patient after patient come in the door, and they collected zero dollars,” McDonald says. “They didn’t even have a credit card machine at the front door.” That’s the type of workflow that must change.
• Provide upfront financial counseling. ASCs can help patients understand what they will owe in copay and what their remaining deductible is. Providing this counseling will keep the costs transparent, so the patient is not suddenly hit with an unexpectedly big bill.
“This could change someone’s role in the front office,” McDonald says. “Figure out what the patient will owe and give this information to the front desk and the patient.”
The information is based on the patient’s current deductible, and the amount should be rechecked on the day before the procedure because it could change, McDonald adds.
“If you check the day before the procedure, you might have fewer refunds to process,” he says.
Technology can make financial determinations and counseling easier. A software product could obtain information from insurance companies and compute the remaining deductible and out-of-pocket costs, based on the insurer’s and ASC’s arrangement, McDonald notes. It’s a mistake financially and from a patient satisfaction standpoint to not provide this counseling, he warns.
“My son went in for knee surgery recently, and I knew I would have out-of-pocket expenses because I had not met my deductible,” McDonald recalls. “I called the surgery center to say that my son was coming in and to ask for our cost.”
The woman who answered the phone was dismissive. “She laughed at me, saying, ‘Sir, why do you want to know ahead of time? Just come in, have the surgery, and we’ll send you a statement for what’s leftover,’” he recalls. “That’s the way people have run their business. I pressed her, and she said it might take her 30 minutes, so I told her to put me on hold.”
If ASCs want satisfied patients, then upfront cost disclosure is crucial.
“If patients don’t know how much the procedure costs and then two months later they get a bill, you have a problem,” McDonald explains. “The majority of facilities live in fear of alerting patients up front of what they owe. They think they won’t have the surgery done if they know what it will cost them. Would you rather patients not have the surgery done, or would you rather patients have it done and you don’t get paid?”
• Offer various ways to pay. It is also important to provide payment options and plans. Credit card kiosks or down payments coupled with monthly plans are other options. Once patients know how much they still owe toward their deductible, they might change their surgery date to improve their financial advantage. So, if they’ve met the deductible or most of it near the end of a calendar year, patients might wish to schedule the procedure before the end of that year. If they have not yet satisfied the deductible, patients might wish to push surgery into the next year. Some patients maintain a health savings account, which they can use to pay out-of-pocket costs. These patients have saved money for anticipated healthcare expenses, and they can use health savings accounts cards like debit cards.
• Obtain help from professionals. “A lot of ASCs use billing companies,” McDonald notes. “What I’d also encourage [ASCs] to do is renegotiate their contracts with billing companies.”
Billing companies often charge 5% for handling the billing, and that’s fine when these companies carry out most of the work, he notes.
“But in today’s environment, there’s a huge shift where there is a lot more onus on the ASC to collect upfront, and the ASC has not renegotiated those contracts to reflect the change,” McDonald says. “The billing cost should be 3% or less because the ASC is taking on more of the upfront work effort.”
Surgery centers have seen an increase in high deductibles in recent years, which has created new billing workflow issues.
Subscribe Now for Access
You have reached your article limit for the month. We hope you found our articles both enjoyable and insightful. For information on new subscriptions, product trials, alternative billing arrangements or group and site discounts please call 800-688-2421. We look forward to having you as a long-term member of the Relias Media community.